Correlation Between Woori Financial and Sandy Spring
Can any of the company-specific risk be diversified away by investing in both Woori Financial and Sandy Spring at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Woori Financial and Sandy Spring into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Financial Group and Sandy Spring Bancorp, you can compare the effects of market volatilities on Woori Financial and Sandy Spring and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Woori Financial with a short position of Sandy Spring. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Financial and Sandy Spring.
Diversification Opportunities for Woori Financial and Sandy Spring
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woori and Sandy is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Woori Financial Group and Sandy Spring Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandy Spring Bancorp and Woori Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Woori Financial Group are associated (or correlated) with Sandy Spring. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandy Spring Bancorp has no effect on the direction of Woori Financial i.e., Woori Financial and Sandy Spring go up and down completely randomly.
Pair Corralation between Woori Financial and Sandy Spring
Allowing for the 90-day total investment horizon Woori Financial is expected to generate 58.66 times less return on investment than Sandy Spring. But when comparing it to its historical volatility, Woori Financial Group is 1.97 times less risky than Sandy Spring. It trades about 0.01 of its potential returns per unit of risk. Sandy Spring Bancorp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,207 in Sandy Spring Bancorp on August 24, 2024 and sell it today you would earn a total of 510.00 from holding Sandy Spring Bancorp or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Financial Group vs. Sandy Spring Bancorp
Performance |
| Timeline |
| Woori Financial Group |
| Sandy Spring Bancorp |
Woori Financial and Sandy Spring Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Financial and Sandy Spring
The main advantage of trading using opposite Woori Financial and Sandy Spring positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Financial position performs unexpectedly, Sandy Spring can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sandy Spring will offset losses from the drop in Sandy Spring's long position.| Woori Financial vs. Banco Bradesco SA | Woori Financial vs. Itau Unibanco Banco | Woori Financial vs. Banco Santander Brasil | Woori Financial vs. Western Alliance Bancorporation |
| Sandy Spring vs. Northrim BanCorp | Sandy Spring vs. Provident Financial Services | Sandy Spring vs. Community Trust Bancorp | Sandy Spring vs. First Interstate BancSystem |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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